Posted
by
kdawsonon Wednesday February 24, 2010 @12:25AM
from the ridicule-they-deserve dept.

An anonymous reader sends word that USB VOIP company Magicjack lost a lawsuit against Boing Boing when the judge declared the legal action a SLAPP (strategic lawsuit against public participation). Magicjack must pay more than $50,000 in legal costs. Boing Boing has posted a page linking and summarizing all the legal documents relating to the lawsuit.

The summary could have put in a word about how MagicJack sued for defamation after Boing Boing made a post [boingboing.net] highly critical of their EULA, before explaining how the judge shot their suit down as a SLAPP...

convincing me to not buy their product. Too bad, I was considering getting hold of one to play around with it. But I try not to support companies run by litigious pricks with no sense of humor.

I ordered two of them but when I tried to activate the service it dropped the web link midway through. I wound up stuck in a limbo of not being able to activate them. I tried to contact tech support but all they offered is that bloody chat support. Every time I do that I end up typing for a half hour to an hour to solve a five minute problem. They said that was the only option so I canceled the service and warned others. Crappy service cost them a customer. Add $20 to the price and high actual support people! Nice idea bad execution.

But their business model is unsustainable. There are real, FCC-mandated costs to terminating calls on the PSTN. Those costs are more than $20/year if you terminate even a few hours of calls in rural areas, and can easily exceed $20/year even if you only ever call metro numbers.

The only way MagicJack can make a go of it is by becoming a CLEC, preferably in areas with high termination fees, then collecting those termination fees on inbound calls and hoping that they get enough inbound traffic to pay termination fees on all their outbound calls. Presumably most of their outbound calls are to low-rate metro areas, which makes things easier, but it's still playing an arbitrage game. They also stack they deck by explicitly block some high-termination-rate areas -- mostly those used by other companies with the same business model -- meaning you simply can't connect with some people or services in high-tarrif regions.

The long and the short of it is real phone companies won't put up with this for long if they see it as a real threat. They'll either start doing it themselves and the mandatory termination fees will be restructured, or they'll find some way to make it illegal/convince their lawmakers and regulators that it already is illegal.

The problem with this whole line of thinking is that we don't know what Dan Borislow's lawyers said to him. We only know what Dan Borislow says about his lawyers.

Trust me, every day good lawyers say to their clients the equivalent of "if things blow up, just blame it your lawyer". They often do this when their clients say "I don't care about the probability of getting what I want, I want to got for it. How can I do damage control?"

So my boss bought these for our office, and as the tech guy I had to actually deal with them. The device itself is actually quite good, but their company is an abomination of a decent business. One of the jacks stopped working, and so I figured that it should be replaced with the option of transferring our old number to the new jack. Their customer service jerked me around for hours until one of them finally sent me a link to their terms and hung up on me. Basically, once they have your money they will jump through hoops to not help you at all. It is such a sleazy company and I hope nobody here gets fooled by them and actually buys it. Pay more for your service just to deal with a reputable company.

Yeah, but they're not doing that at all. All it is doing to opening (in the background) something similar to MSN Live Messenger (or Yahoo, or any other major chat client) voice chat. There's no compression to speak of and certainly no QoS stuff. LIke recording yourself in a WAV file and emailing it to someone...only really fast. And then there's a small rj-11 jack to plug in a handset. As far as I know web based voice chats are not regulated at all.

...and it concluded:
"The license agreement above has a high calculated interest ID. It's extremely long, and there were a high number of detected 'interesting' words or phrases." That means Eulalyzer thinks its a bad EULA. The interesting words or phrases are listed and can be viewed in context: (1) Advertising, (2) Emergency Calls or Services, (3) Third Party, (4) Web Site Address, and (5) Without Notice. I've never seen a EULA with that many "'interesting' words or phrases" called out by the program.

EULAlyzer is a free (download: http://www.javacoolsoftware.com/downloads.html [javacoolsoftware.com]). If, like me, you don't have the time to read through the EULA's for software you're thinking of purchasing, this is just the program for you. At the very least, it will give you a "heads up" and point you to the 'interesting' parts of the EULA where you can, then, read as much "legalese" as you can stomach..

Last I checked Magicjack cost money as well. $20.00 a year to "renew" As well as being bombarded with Advertisements on your PC and your phone calls AND they reserve the right to sell your information to marketing companies.... It's all in the EULA, you agree to it by using the device and service.

$40.00 = 2000 minutes of skypeout calls to regular and cellular numbers in the USA. Not something to sneeze at. so the yearly cost is another 1000 minutes. That's more than a year of calls on my home number. if you exclude all the telemarketers.

for my $100 a MONTH to at&t for the iphone... I get 20-45 minutes of wait time for the smallest tech or customer service issues... and don't even get them resolved sometimes. I tried magic jack's chat, I was at least in contact with someone in a few minutes - I understand the cost that phone support adds to any company and I have no complaints. i also agree with someone earlier who said that at least magicjack states that in their EULA while other companies just do it, and don't state it. I'm pretty sure it's only so they can server relevant ads.... sound familiar Google?